SALES, RENTALS & LAYAWAYS

PROTECTING EVERYTHING THAT HAS EVER BEEN OF VALUE TO YOU

Open 24/7/365

We Have A Life-Time Warranty /
Guarantee On All Products. (Includes Parts And Labor)

State Budgets Hit Hard By Trumponomics Create A Drag On U.S. Recovery

Aid to states and cities is a sticking point as talks in Congress bog down over next round of stimulus. State Budgets Hit Hard By Trumponomics Create A Drag On U.S. Recovery

Spending cuts by state and local governments grappling with the coronavirus pandemic pose a headwind to the U.S. economic recovery as lawmakers consider how much federal aid to provide.

State and local governments reduced spending at a 5.6% annual rate in the second quarter as they laid off workers and pulled back on services to offset plunging tax revenues. More cuts are on the way.

Moody’s Analytics estimates that without additional federal aid, state and local budget shortfalls will total roughly $500 billion over the next two fiscal years. That would shave more than 3 percentage points off U.S. gross domestic product and cost more than 4 million jobs, said Dan White, head of fiscal policy research at Moody’s.

Talks in Congress on another economic relief package have stalled, with assistance for state and local governments among the sticking points. Democrats are pushing for $950 billion.

Republican leaders, who didn’t include aid for cities and states in their initial plan, have offered $150 billion. They cite concerns about growing U.S. deficits and debt, and they say some state budget woes predate the pandemic.

President Trump, in a tweet on Monday, suggested Democrats “only wanted BAILOUT MONEY for Democrat run states and cities that are failing badly.”

Estimates of state revenue shortfalls show that the effects of the pandemic will reverberate in red and blue states alike, although its severity and the extent of lockdowns varies by state, and there are Republicans among the lawmakers calling for aid.

“I understand concerns about spending, but the cost of doing nothing is worse,” said Sen. Bill Cassidy (R., La.). His home state of Louisiana has been hit hard by the virus and faces a 46% revenue decline, Moody’s estimated.

Mr. Cassidy has introduced a measure with Sen. Bob Menendez (D., N.J.) that would provide $500 billion for state and local governments.

“The United States cannot fully recover economically if local communities cannot provide basic services, allowing commerce to flow,” Mr. Cassidy said on the Senate floor last month.

State and local governments spent or invested $2.33 trillion in 2019, equivalent to 10.9% of gross domestic product. They employ 13% of U.S. workers, whose spending fuels economic growth and who help deliver essential services and safety-net programs, such as unemployment insurance and nutrition assistance.

“Not supporting state and local governments is kind of shooting yourself in the foot,” said Louise Sheiner, policy director at the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.

State and local governments received $150 billion in the last major economic relief package, which was limited to coronavirus-related expenses.

About 75% of the funds have already been allocated, said Wesley Tharpe, deputy director for state policy at the Center on Budget and Policy Priorities. Lawmakers from both parties have called for loosening restrictions on how the remaining money can be spent.

Analyses of state finances show many were well-prepared for an economic downturn—just not the biggest one since the Great Depression. As of 2019, the median state had 7.8% of its general fund set aside in reserve, according to the National Association of State Budget Officers, up from 4.8% on the eve of the 2007-09 recession.

The U.S. economy shrank 9.5% in the second quarter from the previous three months, the steepest decline on record. Economists say the $3 trillion in economic relief already provided by Congress, including money for small businesses, direct payments to households and expanded unemployment insurance, prevented a much deeper slump.

Michael Strain, director of economic policy studies at the conservative American Enterprise Institute, said Congress should take similar steps to fill the budget hole for state and local governments, which have seen revenues decline by 15% to 20% in some cases.

Unlike the federal government, which can borrow to close the gap between expenses and revenues, almost all states are required to balance their budgets each year. So they must cut costs, increase taxes or dip into reserves to close the gap. State and local governments have cut 1.2 million jobs from March through July, the Labor Department said last week.

“The more state and local employees who are laid off, the higher the unemployment rate goes and the longer it takes to get the economy back to normal,” Mr. Strain said.

The potential size of budget gaps is difficult to measure, given uncertainty about the trajectory of the virus.

The Tax Policy Center, a Washington think tank run by a former Obama administration official, estimates state shortfalls could total $125 billion in the fiscal year ending next June 30, while the Center on Budget and Policy Priorities puts the gap at around $290 billion. Those estimates don’t include local government funding needs.

As challenged as their budgets are, states have a cushion in the form of rainy day funds built up during the past few years, when the strong economy boosted tax revenues. California was among several states that tapped into reserves this year, using about half, or roughly $9 billion, to help balance its $202 billion budget in June.

Still, states have been wary of using all their reserves this year, said Brian Sigritz, director of state fiscal studies at the budget officers’ association. Next year could be worse, and hurricanes, earthquakes or other natural disasters could strike at any moment.

Many states, fresh from their last round of budget cuts, are bracing for an even more challenging year ahead.

“As you’ve already made spending cuts, it becomes more difficult to make cuts going forward,” Mr. Sigritz said.

State Budgets Hit Hard,State Budgets Hit Hard,State Budgets Hit Hard,State Budgets Hit Hard,State Budgets Hit Hard,State Budgets Hit Hard,State Budgets Hit Hard,State Budgets Hit Hard,State Budgets Hit Hard,

Related Articles:

Joe Biden-Kamala Harris Ticket Makes Debut After Historic VP Pick

Biden, Obama Release Campaign Video Applauding Their Achievements

Small Businesses Brace For Prolonged Crisis, Short On Cash And Customers (#GotBitcoin?)

Ultimate Resource For Violations of The U.S. Constitution Including “Money” And Coronavirus

Trump Campaign Forced To Use Tele-Rallies As Coronavirus Cases Surge

Roger Stone Uses Racial Slur In Live Radio Interview With Black Host

The Fed Is Setting The Stage For Hyper-Inflation Of The Dollar (#GotBitcoin?)

The Next Phase Of The Retail Apocalypse: Stores Reborn As E-Commerce Warehouses

Famous Economist Mohamed El-Erian Warns Investors To Stay Away From Zombie Companies And Zombie Markets

Republicans Alarmed By Democratic Senate Hopefuls’ Fundraising Haul

American Airlines Plans To Furlough Up To 25,000 Workers This Fall (#GotBitcoin?)

Consumer Appetite For Cars, Homes Bolsters U.S. Economy

Banks Get Ready For Wave of Recession-Led Loan Defaults (#GotBitcoin?)

32% of U.S. Households Missed Their July Housing Payments

What You Need To Know About The New Small-Business Bankruptcy Laws

Police Wrestle With Surge In Crime In U.S. Cities Amid Defunding Efforts

Here’s An Investment That Perfectly Tracks The Economy

Fed, Treasury Disagreements Slowed Start of Main Street Lending Program

When A Texas Oil Boom Goes Busts

Trump Takes Cognitive Test And Can Identify A Rhino vs A Camel

Don’t Know How Much Stimulus Is Needed? Put It On Autopilot, Some Say

Colorado Police Chief Fires Three Officers Over Reenacted Chokehold Placed On Elijah Mcclain

Republicans Give Trump Labor Day Deadline To Turn Things Around. After That, He’s On His Own

Chapter 11 Business Bankruptcies Rose 26% In First Half of 2020

Chaotic Trump Administration Plus Russian Bounty Intelligence Equals Loss Of American Lives

Supreme Court Orders Restructuring of Consumer-Finance Watchdog

Reddit, Acting Against Hate Speech, Bans ‘The_Donald’ Subreddit

Class Action Lawsuit Alleges Visa Subsidiary Violated Privacy And Data Protections Of Venmo, Stripe, Square’s Cash App, Robinhood & More

Private Equity’s Trillion-Dollar Piggy Bank Holds Little For Struggling Companies (#GotBitcoin?)

TikTok Teens Overload Trump’s Online Store With Orders Only To Abandon Shopping Cart

Bill Gates Says Trump’s Lack Of Leadership Is Making Pandemic Picture ‘More Bleak Than I Would Have Expected’

Fed Stress Test Finds U.S. Banks Not Healthy Enough To Withstand “Few Quarters” Economic Downturn

Elizabeth Warren Was Right About Whacky Stockmarket Fundamentals (#GotBitcoin?)

Two Of The Latest High-Profile Trump Resignations

US Banks Have Seen A Record $2 Trillion Surge Of Deposits Since The Coronavirus Crisis Began

Trump Gets KPOP’d And Tic Toc’d As Teens Mobilized To Derail Trump’s Tulsa Rally

The Dangerous Secrets Our Working-From-Home Photos Reveal

New Decentralized Cybersecurity Solution Enables Passwordless Logins (#GotBitcoin?)

CIA’s ‘Lax’ Security Led To Massive Theft of Hacking Tools, Internal Report Finds

Signal Is A Truly Private Chat App Ideal For Protestors (#GotBitcoin?)

Maintain Your Privacy And Security During A Protest (#GotBitcoin?)

Borrower, Beware: Credit-Card Fraud Attempts Rise During The Coronavirus Crisis

Senate Vote Allows FBI Access To Your Browsing History Without A Warrant And What You Can Do About It

Report Says Chinese And Iranian Hackers Seek To Steal Coronavirus Research

28,000 GoDaddy Hosting Accounts Compromised

Some States Dabble In Online Voting, Weighing Pandemic Against Cybersecurity Concerns

Antonopoulos: Chainalysis Is Helping World’s Worst Dictators & Regimes (#GotBitcoin?)

Survey Shows Many BTC Holders Use Hardware Wallet, Have Backup Keys (#GotBitcoin?)

Blockfolio Quietly Patches Years-Old Security Hole That Exposed Source Code (#GotBitcoin?)

Apple iPhone May Be Vulnerable To Email (Mail) Hack

Gates Foundation, WHO And Wuhan Institute of Virology All Hacked!

Google Hack Requires That You Updated Chrome Browser Now To Version: 81.0.4044.113

Privacy-Oriented Browsers Gain Traction (#GotBitcoin?)

Can Blockchain Technology Counter US Anti-Message Encryption Bill? (#GotBitcoin?)

Chinese Military Turns To U.S. University To Conduct Covert Research

CIA Has Had Keys To Global Communication Encryption Since WWII

Hostile Spies Target U.S. With Cyber, Encryption, Big Data, Report Finds

Hackers Stole And Encrypted Data of 5 U.S. Law Firms, Demand 2 Crypto Ransoms

Ex-CIA Engineer Goes On Trial For Massive Leak

Multi One Password (Portable App)

After He Fell For A $40K Phone Scam, His Bank Offered To Help—If He Stayed Quiet (#GotBitcoin?)

Your PGP Key? Make Sure It’s Up To Date

Bezos’ Phone Allegedly Hacked By Account Associated With Crown Prince

Major Companies Shared Vulnerability Used In Travelex Cyberattack (#GotBitcoin?)

Microsoft Releases Patch To Patch Windows Flaw Detected By NSA

VPN Tier List 2020 (Comparison Table)

SEC Market-Surveillance Project Hits Snag Over Hacker Fears

Inside China’s Major US Corporate Hack

Twitter Bug Exposed Millions of User Phone Numbers

U.S. Cyber Officials Give Holiday Shopping Advice For Consumers

Is Cayla The Toy Doll A Domestic Spy?

Google’s “Project Nightingale” Faces Government Inquiry Over Patient Privacy.

Which Password Managers Have Been Hacked?

DNS Over HTTPS Increases User Privacy And Security By Preventing Eavesdropping And Manipulation

Russia Steps Up Efforts To Shield Its Hackers From Extradition To U.S.

Barr Revives Debate Over ‘Warrant-Proof’ Encryption (#GotBitcoin?)

Should Consumers Be Able To Sell Their Own Personal Data?

Doordash Says Security Breach Affected Millions Of People (#GotBitcoin?)

Fraudsters Used AI To Mimic CEO’s Voice In Unusual Cybercrime Case (#GotBitcoin?)

Pearson Hack Exposed Details on Thousands of U.S. Students (#GotBitcoin?)

Cyber Hack Got Access To Over 700,000 IRS Accounts (#GotBitcoin?)

Take A Road Trip With Hotel Hackers (#GotBitcoin?)

Hackers Prove The Insecurity Of Trump’s Border Security By Stealing Photos Of Travelers’ Faces (#GotBitcoin?)

Hackers Target Loyalty Rewards Programs (#GotBitcoin?)

Taxpayer Money Finances IRS “Star Trek” Parody (#GotBitcoin?)

IRS Fails To Prevent $1.6 Billion In Tax Identity Theft (#GotBitcoin?)

IRS Workers Who Failed To Pay Taxes Got Bonuses (#GotBitcoin?)

Trump DOJ Declines To Charge Lois Lerner In IRS Scandal (#GotBitcoin?)

DMV Hacked! Your Personal Records Are Now Being Transmitted To Croatia (#GotBitcoin?)

Poor Cyber Practices Plague The Pentagon (#GotBitcoin?)

Tensions Flare As Hackers Root Out Flaws In Voting Machines (#GotBitcoin?)

3-29-2019 FBI Retools To Counter Cyber Threats, 4-12-2019 Thousands Of FBI Personal Data Is Stolen (#GotBitcoin?)

Overseas Traders Face Charges For Hacking SEC’s Public Filings Site (#GotBitcoin?)

Group Hacks FBI Websites, Posts Personal Info On Agents. Trump Can’t Protect You! (#GotBitcoin?)

SEC Hack Proves Bitcoin Has Better Data Security (#GotBitcoin?)

Hackers Prove The Insecurity Of Trump’s Border Security By Stealing Photos Of Travelers’ Faces (#GotBitcoin?)

Our Facebook Page

Your Questions And Comments Are Greatly Appreciated.

Monty H. & Carolyn A.

Go back

Leave a Reply